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refuse to enforce it, except in so far as it may deem just and equitable. The doctrine on this subject may be thus stated: When a decree is incomplete, or becomes ineffective for the want of means by which it may be executed, and application is made to a court of equity to render the decree effective, the doctrine of res adjudicata will not operate to prevent the court from looking into the nature and character of the decree for the purpose of determining whether it would be just and equitable that the complainant should be assisted, and his defective decree pieced out. If the decree be found unjust and inequitable, the court, under such circumstances, will not be moved to action, but leave the party to his remedy at law, or extend aid on condition that he do equity. 2 Daniell, Ch. Prac. (4th Ed.) 1586; Adams, Eq. 416; Gay v. Parpart, 106 U. S. 699, 1 Sup.
; Ct. 456; Lawrence Manuf'g Co. v. Janesville Cotton Mills, 138 U, S. 552, 11 Sup. Ct. 402. This doctrine, in its last analysis, rests upon the settled principle that he who seeks equity must do equity. Manifestly, this principle must apply to a case like the one in hand, when the question is purely one of remedy. This court ought not to grant any relief, except such as in equity and justice is appropriate, under all the circumstances. This doctrine would apply if the defendant, resisting partial redemption, united in itself only the rights of the mortgagor corporation and the mortgagees who were parties to the Ohio decree. If this doctrine goes so far as that the court may look into the merits of the decree which it is asked to piece out, a fortiori it is applicable when such a complainant demands a particular remedy because it is supposed to be an “incident” of the remedy which has become impracticable, or because it is supposed to be most analagous. Before a court of equity will be moved to lend its aid to an ineffective decree, it will inquire into all the circumstances calculated to enlighten the conscience of the court, and grant its aid only upon such terms and conditions as are just.
4. Among the matters which the court should take cognizance of when Compton asks to be allowed a separate redemption of the Ohio property, is an inquiry as to his right to redeem at all, for want of proper parties. The lien which he asserts is not one for his exclusive benefit. All of the unpaid creditors of the Toledo & Wabash Railway Company are equally entitled to share in the security which he is undertaking to appropriate to the satisfaction of his own claims. The Ohio decree made no disposition of the proceeds to arise from the sale awarded him, but directed that the proceeds should be paid into court, and held subject to further orders to be made on the footing of the decree. The decree itself only declared the lien. The lien is the creature of statute, and arose upon the consummation of the consolidation of 1865, by force of the statute, and his decree adds nothing to its efficiency, aside from the finding that he was a creditor. Compton's Ohio suit ought to have been a suit for the equal benefit of all entitled to share in the benefits of the lien asserted. It was not. His present suit should have been a suit for the benefit of the whole class, and so brought as to quiet the title of the present owner of the property. It is not. His decree amounts to nothing more than a declaration of a valid and unsatisfied lien, superior in rank to all mortgages subsequent to the consolidation of 1865, and inferior to all antecedent to that date. That the defendants to the suit in which the statute was construed and the lien declared did not demur because his suit was not a class suit is no answer to the objection now interposed, when he asks for a different remedy in aid of an otherwise ineffective decree. But if the Toledo & Wabash Railway Company be regarded as cut off from interposing such an objection, in so far as it is the assignee and representative of the mortgagors and mortgagees who were parties to his Ohio suit, yet, in so far as it is the assignee of the mortgagees who were not parties, it is not estopped. The objection lies at the very foundation of his right to a partial redemption, because it will leave the defendant corporation holding the remainder of the estate embraced within the lien subject to future redemption by the appellant, or any other creditor interested in the class lien. But, more than this, the appellee, as the equitable assignee of mortgages junior to the Compton lien, has the unquestioned right to redeem from the creditors entitled to the benefit of the lien. They are, perhaps, hundreds in number, and the aggregate of their claims is wholly unkņown. If it redeem from Compton by paying off his debt, it will continue subject to a like liability for an unknown amount, and to an unknown number of people. It may be said that this is an objection which applies to any redemption at all by him. This may be admitted, for, undoubtedly, Compton should have so brought his case as to bring all interested in the lien before the court, that the purchaser under junior liens might have the option of redeeming this lien and quieting its title, or submitting to redemption, and surrendering its title to the property covered by this lien. Not having done this, he ought not to be allowed to further aggravate the situation by compelling the appellee to submit to partial redemption.
5. There are other objections which are peculiarly applicable when a complainant seeks relief through equitable redemption. The senior mortgages upon the Indiana and Ohio Divisions operated to vest in the mortgagees the legal title, subject to divestiture upon payment of the debts secured within the time limited by the contract. The failure to pay on the pay day made the title at law absolute. There was no statutory right of redemption, and no redemption or buying back was admissible, except through application to a court of equity. Chancery courts, to relieve against the forfeiture which at law was absolute, have created an equitable right of redemption, which it allows upon equitable principles, and subject to the equitable maxim that "he who seeks equity must do equity.” Of course, a court of chancery does not, through this maxim, obtain authority to impose arbitrary conditions, not warranted by settled principles of equity jurisprudence. The boundaries within which it may be applied are well defined by Mr. Pomeroy, who says:
“The meaning is that whatever be the nature of the controversy between two definite parties, and whatever be the nature of the remedy demanded, the court will not confer its equitable relief upon the party seeking its inter
position and aid, unless he has acknowledged and conceded, or will admit and provide for, all the equitable rights, claims, and demands justly belonging to the adversary party, and growing out of, or necessarily involved in, the subject-matter of the controversy. It says, in effect, that the court will give the plaintiff the relief to which he is entitled only upon condition that he has given, or consents to give, the defendant such corresponding rights as he also may be entitled to in respect of the subject-matter of the suit." Pom. Eq. Jur. $ 385.
The first objection which has been urged to a partial redemption grows out of the relation of principal and surety which exists between the Toledo, Wabash & Western Railway Company and the Toledo & Wabash Railway Company. In November, 1858, the
, Ohio and Indiana mortgagor companies consolidated their properties, and were merged into a new consolidated company, entitled the Toledo & Wabash Railway Company, which new company subsequently issued the bonds called “Equipment Bonds," of which Compton holds 150. The result of this consolidation is very tersely stated by Mr. Justice Gray, when considering the effect of this very consolidation, who said the result was a new corporation, “which took their places, succeeded to their property, and assumed their liabilities." Railway Co. v. Ham, 114 U. S. 595, 5 Sup. Ct. 1081; Shields v. Ohio, 95 Ú. S. 319; Compton v. Railroad Co., 45 Ohio St. 623, 16 N. E. 110, and 18 N. E. 380.
The Ohio consolidation statute, under which the successive con solidations occurred, was passed April 10, 1856, and expressly pro vided that:
“All debts, liabilities and duties of either of said companies shall henceforth attach to said new corporation and be enforced against it to the same extent as if said debts, liabilities and duties had been contracted by it."
The Indiana act of February 23, 1853, authorized the consolidation of railroad companies which might connect at the state line with a road of another state constructed to the state line, “upon such terms as may be by them mutually agreed upon in accordance with the laws of the adjoining state with whose road or roads connections are thus formed.” 1 Gavin & H. St. 526. The consolidation agreement, among other things, provided:
"That the said consolidated company shall assume, and be liable for, all outstanding bonds, indebtedness, and other liabilities of each of the parties to this agreement; and all mortgages given by either of the parties shall be as valid and binding upon the whole of the road, real estate, fixtures, and personal property which may be described in such mortgage as though the same had been originally executed by such consolidated corporation.”
The undoubted and undisputed effect of this consolidation was that the Toledo, Wabash & Western Railway Company became obligated to pay off and discharge each one of the four mortgage debts which existed at the date of this consolidation, in 1858. Its liability was not merely that of one buying property subject to an existing incumbrance, for it personally assumed, and by the statute became personally liable for, the entire indebtedness of its constituent companies. This much is expressly decided by the Ham Case and the Compton Case, heretofore cited. Precisely the same liability was imposed upon each of the successor consolidated companies, who by subsequent consolidations succeeded to the property of the original mortgagor companies. This is very clearly recog. nized in the opinion of Judge TAFT, when he says, in his statement of the case, that “many of the constituent companies had issued bonds secured by mortgages upon their respective lines, and as consolidations took place the new companies assumed the obligations of the bonded and other debts of their constituents."
The successive assumptions of these prior mortgage debts did not operate to release or discharge the liability of the original mortgage debtors, or that of any obligor by assumption precedent to the last consolidation. The original mortgage debtors, and each succeeding obligor, were liable to the creditors as joint and several principals, and for deficiency in value of mortgaged property the creditors might have judgment against any or all who were thus liable as principals. The Ohio statute authorizing consolidations for the purpose of preserving the rights of creditors, provided that “the respective corporations may be deemed to be in existence to preserve the same." "A purchaser who assumes the mortgage becomes, as to the mortgagor, the principal debtor, and the mortgagor a surety; but the mortgagee, unless he has assented to such an arrangement, may treat both as principal debtors, and may have a personal decree against both. The mere assignment by the mortgagor of his interest in the mortgaged premises to a third person, who agrees to pay off the mortgaged debt, does not release the mortgagor. There is no novation, unless there is something to show that the mortgagee has released the mortgagor, and has agreed to look solely to the purchaser for payment of the mortgage debt.” Jones, Mortg. § 741; Shepherd v. May, 115 U. S. 510, 6 Sup. Ct. 119; Burr v. Beers, 24 N. Y. 178; Ellis v. Johnson, 96 Ind. 377; Insurance Co. v. Hanford, 27 Fed. 588. As between the mortgagor and his successor in the title, who assumes the payment of the debts charged thereon by prior lien and the mortgagee, the land is the primary fund for the payment of the debt. Wells v. Tucker, 57 Vt. 223; Jones, Mortg. $8 678a, 740-743; Bank v. Thayer, 136 Mass. 459. Thus, the property which the Toledo, Wabash & Western Railway Company acquired by consolidation of the constituent companies was, as between those companies and their mortgage creditors, the primary fund for the discharge of the mortgage debts. If mortgage creditors release this property without the consent of the original debtor companies, it thereby discharges them, to the extent of the value of the security thus abandoned. Paine v. Jones, 14 Hun, 577; Remsen v. Beekman, 25 N. Y. 552; Bowne v. Lynde, 91 N. Y. 92.
This right of the surety companies to have the property which became a primary fund applied in exoneration of their relations as sureties for the new consolidated company is not a right which can be affected or waived by any successor company which occupied the relation of principal towards such surety. The surety entitled to such exoneration might waive it, and so could the creditor; but, as we have seen, a creditor would thereby release the obligation of the surety, to the extent of the value of the property released. This principle has no application, as a consequence of the original consolidation by which the Toledo & Wabash Railway Company was formed in 1858. Its constituent companies were not sureties for each other, and the promise of the consolidated company was a separate promise to each of its constituents. The obligation of the Toledo & Wabash Railway Company, so far as it rested upon the consolidation agreement, to pay the debts of its Indiana constituent, was to that constituent alone; and the Ohio constituent could not object to a separate sale of the Ohio Division, or its separate redemption, for no obligation to it would be violated. But quite a new state of affairs arose so soon as the second consolidation occurred, in 1865. The consideration for the consolidation which moved to the Toledo & Wabash Railway Company was that, in consideration of all its property, the new consolidated company, the Toledo, Wabash & Western Railway Company, would pay all its obligations and liabilities, of every kind and character. This, of course, included its obligations to pay off the two Indiana divisional mortgages and the two Ohio divisional mortgages, all four of which had been assumed as a condition of the consolidation in 1858. Upon the consummation of this act of consolidation, there arose the relation of principal and surety between the Toledo, Wabash & Western Railway Company and the Toledo & Wabash Railway Company, which relation resulted in an obligation of the former company to apply all of the property of the latter company in discharge of its debts, and in exoneration of its liabilities. The consolidation agreement by which the Toledo, Wabash & Western Railway Company was formed, in 1865, set out the indebtedness of the Toledo & Wabash Railway Company, and made no distinction between the mortgages on its Indiana and Ohio Divisions. Its bonded debts were described as: First mortgage bonds...
2,500,000 Equipment bonds..
600,000 It provided that all its rights, franchises, property, debts, and choses in action should vest in the consolidated company, and that the consolidated company should "protect” all of its indebtedness as it should fall due. Thus, the Toledo, Wabash & Western Railway Company assumed the relation of principal obligor, as to all the debts and obligations of its constituents, the Toledo & Wabash Railway Company. The latter company continued bound to the creditor, but, as between it and the Toledo, Wabash & Western, it was a mere surety. Out of this relation originates the right of the Toledo & Wabash Railway Company to object to partial redemption,-a redemption by which the Ohio Division, which is worth more than the mortgage debts secured specifically thereon, may be redeemed separately, leaving the Indiana mortgage debts unpaid and inadequately secured, to the extent of $1,300,000, as demonstrated by the bids on that division under the foreclosure decree. Such a redemption would leave the Toledo & Wabash Railway Company liable on the Indiana bonds to the extent of this deficiency. It would have the right to insist that the whole of its property conveyed to the Toledo, Wabash & Western Railway Company shall be applied in its exoneration;